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  • Writer's pictureRIHANA PEIMAN


In January 2023, this new account was launched as a great savings vehicle for your homebuying goals without paying the tax on these savings. It's the best part of both a Registered Retirement Savings Plan (RRSP), which gives you tax-deduction perks, and a Tax-Free Savings Account (TFSA), which allows your investments to grow without a tax bill, so that the money you put in and earn in this account goes towards the down payment of your first home.

The Contribution Limit

As of January 2023, you can contribute $8,000/ year in your FHSA although it’s important to make sure you don’t over-contribute. FHSA can help you contribute up to $40,000 for your first home.

Eligibility for the FHSA

  • You need to be a resident of Canada

  • You have to be at least 18 years of age (or the age of majority in your province or territory). You can only hold and contribute to a FHSA until the year in which you turn 71.

  • You or your spouse can't own a home in which you lived, at any time in the year the account is opened or during the previous four calendar years

What happens in case you don't use your FHSA to buy a home?

If you don't use your FHSA to buy a home, you can transfer the funds to an RRSP account anytime within 15 years or at the time you need to close your account. The good thing is the transfers will not impact your RRSP’s contribution room. If you withdraw the amount, the funds would be subject to withholding taxes.

Who is considered a first-time homebuyer for FHSA?

For the purposes of FHSA, if you haven’t owned a home within the last four calendar years, you are considered a first-time homebuyer. For example, if you bought your first home in 2013 and sold it in 2016 and have been renting or living with parents or a non-spouse ever since, you would be considered a first-time homebuyer again.

Can You Carry Forward Your Contribution?

Yes, you can carry forward up to $8,000 of your unused contributions to the next year. For example: You contribute $6,000 to your FHSA in 2023. Since the annual limit is $8,000, you can add the unused $2,000 to the following year, for a total of $10,000 in contributions in 2024.


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